Mainstream media has extensively covered efforts to reduce reliance on fossil and nuclear fuels in favor of so-called renewable energy, chief among these being solar and wind energy. Residential and business electric power customers have taken steps to reduce their dependence on the commercial electric power distribution network (commonly called “the grid”) and the electric power utilities that sell electric power through it.
The customers reduce net energy draw not only by reducing consumption by, for example, increasing thermal insulation, selecting more energy-efficient equipment (e.g., appliances) and using it more judiciously, but also by drawing at least some of the electric power they need from renewable-energy power sources, including windmills and photovoltaic (“solar”) panels, they have installed on their own premises. Relatively few of these customers derive enough electric power from these premises power sources to go “off the grid.” Instead, most customers remain “on the grid,” using the premises power sources as much as possible and drawing the remaining electric power they need from the grid.
Most states have passed laws permitting distributed generation (DG), colloquially known as “grid-tying.” DG is the coupling of premises power sources to the existing power grid such that the sources can synchronize with, and supply power to, the grid. To compensate customers having these sources for the power they provide to the grid, states have also passed laws that enable “net-billing” or “net-metering.” Net-billing employs a second electric meter, separate from the usual one that measures power a customer takes from the grid, that measures the power that the customer's premises power sources supply to the grid. Net-metering uses a single, bidirectional electric meter that keeps track of net power flow to or from the grid.